I agree, the 4% withdrawal rate is the rule of thumb, however, this rule is flawed and many retirees are finding this out the hard way. The 4% rule is based on 1994 research conducted by William Bangen and was developed by back testing historical rates of return and found that 4% withdrawals to be the most likely to fund a full retirement. This research failed to take into account a couple of huge factors, 1, it did not consider the fees being assessed to a client's account during the distribution phase, 2, it did not consider the taxable implications of the withdrawals, 3, and MOST IMPORTANTLY did not consider the rate of withdrawal during sustained low interest rates. In the current low interest rate world, this rule is unsustainable. This is not to mention the fact that people are living WAY longer today than they were in 1994 when this research was conducged. While this product may be expensive, at least she is guaranteed a true 5% for life (not 4% minus fees) and she is also guaranteed never to run out of money as long as the insurance company is solvent. Jackson looks as though it is one of the only carriers that ratings haven't changed since 2007 so that's a good sign. Does she want 4% - fees or a true 5% without equity allocation restrictions, letting her ride the index for as long as she lives without having to worry about a fixed income allocation because she has a guarantee? Tough question and not as simple as some in this thread make it seem to be.